American consumers hear about celebrities' high net worth often, and those big numbers, with their slew of zeroes, have made people think that the term only applies to the rich and famous. It doesn’t.
Financial institutions know that consumers understanding and knowing their net worth is the first step to building it. A recent survey by Credit Karma and Qualtrics found that 67% of American consumers don’t track their net worth.
While 73% of Gen X respondents were not tracking their net worth, 68% of those aged 59 or above reported the same. Along with these segments, women were also more likely to be unaware of their current net worth with 77% reporting not keeping track of it, while 55% of men reported the same.
$0 net worth
31% of Americans report that their net worth is $0 or worse – in the negative. This means that their debt cancels out their assets or outweighs them. In particular, younger consumers are negatively impacted by this trend with 41% of Gen Z reporting having a net worth of $0 or less and 38% of millennials reporting the same.
Usually net worth tends to increase with age. But recent data shows that a considerable portion of Americans that are heading towards retirement (aged 59 or above) also report having net worth of $0 or less.
This may be a direct result of the state of retirement savings and accounts. One in five of all respondents aged 59 and above report not having a retirement account. Another 5% report that they cannot put away money for retirement right now.
Meanwhile, saving for retirement is not an option for 27% of respondents that don't have 401(k) and Roth IRAs. This includes 25% of Gen X respondents and 27% of those aged 59 or above.
These statistics are reflective of the current state of savings, as well as financial literacy in America. Given the current inflationary environment, it is important for consumers to be able to access the right materials, tools, and concepts to be able to build up and save.